Yeah, I'm also thinking about re-balancing my investments & adding something for a short term. You guys on this forum along with general investment sentiment (from what I can gather from reading "The Economist" and "Money" magazines) is pushing me to become a bit more conservative, despite a long time-horizon for most of my investments. I guess you can't time the market, but you can sort of read the signs and try to cushion the possible blow... So please read below & offer comments.
As far as re-balancing, I'm gonna dump Vanguard Balanced Index Fund (VBINX) for Vanguard Star (VGSTX). They're pretty similar as far as distribution (65stocks 35 bonds) but VBINX has been a real laggard for me over the past 2.5 years and my parents have VGSTX and it's been quite a bit better for them. VGSTX is a "fund of funds" and my general impression is that 'dedicated' stock or bond funds do better than hybrids -- maybe due to management?? Comments?
I've also had a good run (who hasn't) with commodities & emerging markets lately, up to a point that 55% of my portfolio is foreign markets & around 20% is commodity-related stocks both foreign & US. (Exxon, Gasprom and mainly T-rowe price New Era fund (PRNEX) etc.) and only 10% is now bonds. I'm not gonna sell anything per se (or should I?), but will drastically reduce contributions to those two areas and shift to bonds, especially higher yielding corporate bonds & intermediate maturity. (Hopefully raising them up to 20% of the portfolio by the end of the year). Having finally gotten around to reading that Bill Gross PIMCO commentary from August, a lot of what he says makes sense. I think once I'm done, I'll have a bit more of a cushion in case of a short to mid-term market downturn, while still maintaining solid holdings in real estate, commodities & developing markets (3 areas that I think will continue to have good yields long-term). Thoughts?
